Bread Bakery – 10 Tips on How To Start A Bakery Business
Nothing smells (or tastes!) quite as delicious as a freshly baked loaf of bread straight from the oven. So it’s hardly surprising that bakery businesses flourish no matter what the economic conditions – bad times or good, people still need their daily bread.
But running a successful bakery requires more than just good bread-making skills. As a business owner, you also need to have the necessary skills to establish and maintain a business, so let’s look at the most important points you will need to start a thriving and popular bread bakery business.
- Qualifications. You need to have the appropriate bakery qualifications. While you may be a whizz at creating a gorgeous sourdough in your home bread maker, those skills won’t get you far in a commercial bakery. Quality bakery courses not only teach you how to make mouth watering breads and pastries, they also teach fundamental business skills to equip you for the real world.
- SWOT. Whether you are going to start a bakery business from scratch, purchase an existing business or buy a franchise, you’ll need to do a SWOT — Strengths, Weaknesses, Opportunities and Threats – Analysis. You may need to discuss the legal aspects with a solicitor as well as consult an accountant who will help you formulate strategic plans and forward projections to assess estimated current and future costs and profits.
- Location, location, location. Running a thriving bakery business requires a steady stream of regular customers. Look for newly established or newly developed suburbs, high traffic locations, and little competition. Also look at areas that may not be well serviced, like industrial estates or high density office blocks where you can draw eager customers.
- Cash flow. Most business advisers will tell you that you need enough available cash funds to support your enterprise for at least 3 months. Set up costs for a bakery can be considerable, particularly if you are starting from scratch, so you need to factor leasing costs for equipment, shop rental, staff wages and food preparation costs into your budget. Know how much it is going to cost you on a weekly basis for the first 3 months and ensure you have sufficient liquid funds to cover all outgoings.
- Equipment. The quality and size of the equipment for buy or lease will be determined by how big your bakery is going to be, how many customers you have forecast on a daily basis and, of course, the amount you have to spend. Don’t over-capitalise on equipment at the outset if you can’t afford it. Look for good quality, pre-owned equipment or a satisfactory leasing agreement for the time being until you are well established.
- Pricing. Your pricing depends on a number of factors, so it makes good sense to consult a business adviser or accountant to help you at the outset. Your prices need to be set at a rate that provides you with an acceptable margin but not so expensive that you drive customers away. The prices will also be determined by the quality of your produce.
- Products. The quality of your bakery goods can make or break your business. A bakery business relies on a high turnover to make a profit, so it’s important you research your market demographic to assess what type of bakery goods are likely to sell well. For example, are you located near schools? Factories? Retailers? The type of customers you expect to service will help you determine the type of products you bake.
- Marketing. A clever and responsive marketing campaign can get your bakery business up and running in no time. You can start advertising before you’ve even opened the doors with a letter-box drop or pamphlets delivered in local neighbourhoods. When you initially open for business, use special offer coupons or provide samples of your breads and pastries to encourage higher sales and plenty of returning customers.
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